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Gas Drillers Are Willing to Pay Tax, Legislators Say

House Democratic Policy Committee Holds Fracking Hearing at Bethlehem's Town Hall

 

Not only are natural gas industry leaders willing to pay a tax for fracking in Pennsylvania, they have already budgeted to do so, the chairman of the House Democratic Policy Committee told those gathered at Bethlehem Town Hall this afternoon for a hearing on Marcellus Shale.

Rep. Michael Sturla of Lancaster County said industry leaders have, during testimony in front of his committee, said they would not leave Pennsylvania even if the state’s fracking tax is 1 percent higher than the highest gas drilling tax in the country.

“Frankly, they have been more forthcoming than some of our politicians who have said (the industry) would leave," Sturla said. “I don’t think it’s the industry that’s the bad guy. It’s other people who are standing in the way.”

Sturla made the comment less than an hour after Gov. Tom Corbett told a Chamber of Commerce gathering just a few miles away at DeSales University that there “can’t be” a gas drilling tax in Pennsylvania, presumably repeating the theory that taxation will chase investment and jobs away.

Industry representatives were not there to speak for themselves. They were invited, but unable to attend the hearing, Sturla said. But they have spoken of the willingness to pay a tax at previous hearings, the legislator said.

“The political reality is either Gov. Corbett needs a new battery for the hearing aid or he needs a new hearing aid,” said state Rep. Eddie Day Pashinski, a committee member who represents greater Wilkes-Barre. “The industry has said they are willing to pay it, so what’s the problem?”

Pashinski urged those in attendance to pressure their legislators to support a fracking tax. Three Lehigh Valley legislators who attended – Rep. Steve Samuelson, Rep. Bob Freeman and Rep. Joseph Brennan – all said they are in favor of a gas drilling tax.

The committee has gotten behind a proposal by state Rep. Gregory Vitali of Delaware County, who has proposed what amounts to a 5.9 percent severance tax on all gas collected through the fracking process in Pennsylvania.

Vitali, who was at the hearing, said the tax is modeled on West Virginia’s gas drilling tax, but levies at a slightly lesser rate.

The bill sets guidelines on how the fracking tax proceeds would be distributed, with one-third going toward state environmental protection programs, one-third going to help local municipalities to deal with the impacts of gas drilling and one-third going into the state’s general fund.

Vitali estimated that the tax, if adopted for the next fiscal year, would generate $200 million in new state revenue and ultimately climb to $400 million in succeeding years.

Several legislators spoke of the importance of increasing state revenue as Corbett looks at slashing funding for education and environmental protection in Pennsylvania in the next fiscal year budget.

More than 30 people attended the hearing in the rotunda attached to City Hall. Several carried signs venting their opposition to fracking in Pennsylvania. Eight invited people testified, including representatives of three environmental groups, the executive director of the County Commissioners Association of Pennsylvania, the research director of the Pennsylvania Budget and Policy Center and the president of the League of Women Voters of Pennsylvania.

All said they favored taxing gas drilling and most also spoke of possible long-term environmental impacts of fracking, including the heightened levels of methane in drinking water and the unknowns about chemicals that are used in fracking.

Most also said they favored more environmental regulation for the industry and an end to its exemption from local property taxes.

Fracking is the process of hydraulically fracturing underground shale deposits to release valuable natural gas deposits. Water from nearby rivers is mixed with “proprietary” chemicals that are pumped underground to crack the shale.

A recent study published by scientists at Duke University has shown that well water drawn within one kilometer of a fracking natural gas well is likely to have 17 times the level of methane as well water from further away.

optimist

11:03 pm on Thursday, May 12, 2011

frackin politics! One term Tom!

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93GEO-Metro

7:45 am on Friday, May 13, 2011

Let's get this right. The drillers aren't going to pay the tax, they're willing to jack the price up, so us consumers pay the tax and they can still show a multi-million dollar profit.

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Rosemary B

3:02 pm on Saturday, May 14, 2011

Reality check! Corporations NEVER pay tax increases. They simply pass the cost to consumers. Or pay less to their investors.That is how it has always been and will always be. By Taxing corporations we are simply taxing ourselves

Steve Millen

9:23 am on Friday, May 13, 2011

Funny Upper Saucon's Patch covered Corbett's speach at DSU where he said there "Cant be" a tax but then in the same breath he said that he supports the idea of an impact fee, which is mostly to protect the areas that will be impacted by the drilling. This is a better idea then taxing them throwing the money in the general fund where it will go to Philadelphia and building stadiums for other cities.

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Bob Rosen

10:50 am on Friday, May 13, 2011

"A recent study published by scientists at Duke University has shown that well water drawn within one kilometer of a fracking natural gas well is likely to have 17 times the level of methane as well water from further away."

The above is tacked on to the end of the article, as though it were just some bit of throwaway addendum.

It's not. It's a game changer.

It's WRITTEN by Duke scientists but PUBLISHED by the ultra-prestigious National Academy of Sciences.

The study identifies a direct correlation between methane contamination in drinking water and nearby drilling sites where fracking has taken place.

And in explaining the mechanism, they REJECT the O&G industry's longtime hypothesis that it's just "naturally occurring" gas that has been showing up in people's water wells all over the country where fracking is going on.

So what is the mechanism? The study says it's between two main possibilities: either it's "leaky gas-well casings" or "that the process of hydraulic fracturing generates new fractures or enlarges existing ones above the target shale formation."

Either way, it's NOT safe.

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Chris Miller

11:16 am on Friday, May 13, 2011

How many taxes are you going to permit the government to levy on you. Keep in mind that these guys will collect the taxes for the government. If the state wants a fracking tax have them eliminate another tax. Otherwise stop the bloody taxing now. Of course those of you who love taxing the evil companies, I would remind you that you can pony up as much as you want in taxes at any time. I have yet to see any pro tax person do that.
Chris Miller

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Merrits

1:26 pm on Friday, May 13, 2011

The ease with which the natural gas companies are agreeing to this tax is troubling. Consider the current outrage at the gigantic profits the OIL companies have made in the past year as prices at the pump continue to climb. We will soon be seeing the same from the gas companies. I'd favor BOTH an impact tax to be kept in a fund to clean up the mess that will surely be made of some of PAs most beautiful forests and rivers AND a state tax (let's go for 2%!) Guaranteed the companies will make more than enough and will be willing to do business here regardless. We're sitting on their gold mine - we seem to be the only ones who don't realize it!

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Tara Zrinski

4:04 pm on Friday, May 13, 2011

Hasn't anybody watched the documentary GASLAND! If you haven't, you should-- PA is part of the plot.
http://topdocumentaryfilms.com/gasland/

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TAR2

8:22 am on Saturday, May 14, 2011

I am a Republican, but I must say corbett is BAD NEWS. He has shown that he will stubbornly stick to his own personal agenda, no matter what. Our legislature needs to challenge this guy.

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BucsLehboy

10:36 pm on Saturday, May 14, 2011

How many jobs has the Shale Gas produced? How much revenue for workers, suppliers, local economy and state cofers has been produced? SHUT UP with your petty tax and criticism of TC. Do youu really want the Ed Rendell show and his Unions thugs running the Sate again?

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Daryl Nerl

11:09 pm on Saturday, May 14, 2011

I don't know. How many jobs have been created? How much have local economies been stimulated? I think these are valid questions that ought to be answered before we assume this new industry is doing as much good as some people claim. And please, let's be more polite. I shouldn't have to tell you not to tell someone else to shut up.

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optimist

12:42 am on Sunday, May 15, 2011

Why should PA be the only place where they don't pay tax? I pay taxes on all kinds of things.

BucsLehboy

9:24 am on Sunday, May 15, 2011

Just a manner of speech, no apology necessary. I dont have the figures on jobs and revenue but I would think those STATS areare thousand of jobs and many tens if not 100's of millions in revenue for local and state economies. Company I work for and I personally sell maintenance supplies into that market and let me tell you every segment has been DEAD except for the Shale over the last 2 years. This is something Pennsylvanians should take notice of and encourage and not kill or tax to death.

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optimist

12:23 pm on Sunday, May 15, 2011

Ed please explain why every other state is able to tax this industry and we should not? They did not leave these other states. It did not ruing them.

Tara Zrinski

11:19 am on Sunday, May 15, 2011

Why are people arguing a tax fracking and not about how to get fracking out of PA? Fracking is environmentally unsound and although it might reap a momentary benefit of employment, the long term effects on the environment and potential hazards of clean up are immense. Below is an excerpt discussing these hazards from a Huffington Post article, April 26, 2011, on a fracking mishap in Canton, PA.

" Workers replaced a damaged portion of a natural gas well Monday night that had spilled thousands of gallons of chemical-laced water into fields and a stream last week. . ." the results of H2O tests are not back yet from EPA; owner says its safe. Read on...

"Drilling a Marcellus Shale well involves pumping millions of gallons of water and sand laced with chemicals down the well bore at high pressure to break up the dense shale rock more than a mile beneath the surface and release the gas trapped inside. The process is known as hydraulic fracturing. Some of that chemical-laced water returns to the surface as a briny stew carrying sulfates, chlorides, metals and naturally occurring radioactivity that the wastewater picks up deep underground."

http://www.huffingtonpost.com/2011/04/26/pennsylvania-fracking-spill-investigation_n_853726.html

France has already put a moratorium on fracking, Economist, May 12 --- http://www.economist.com/node/18682288.

Nothing green about fracking; it is part of the agenda of those concerned only about short term gain for future expense.

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BucsLehboy

4:05 pm on Sunday, May 15, 2011

This Post Gazette indicates about 100.000 jobs but not all in drilling. Sure beats flippin burgers eh?

http://www.post-gazette.com/pg/10099/1048898-28.stm

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Nancy O'Keefe

4:39 pm on Sunday, May 15, 2011

Poisoned drinking water, destroyed landscapes, and gutted towns is a high price to pay for jobs. You took numbers and information from a study paid for by Marcellus Shale. Read further, and you'll find that an independent research group said "the job numbers have little foundation in reality." Read further still, and you find that the drilling jobs are mostly filled by out-of-state workers. Our governor is seriously selling us short -- an understatement.

Nancy O'Keefe

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BucsLehboy

6:41 pm on Sunday, May 15, 2011

I recommend going to Linkedin and checking out several fact based discussion groups, especially for pro-Shale folks out there.

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BucsLehboy

8:37 am on Friday, June 3, 2011

PA Live article May 29 indicated 48,000 new jobs. Still much debate over those numbers. Amazng environmentalist whackos can only whine and not offer any job creating only job killing ideas.
Yes I benefit indriectly so what.

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Michael Limar

1:59 pm on Wednesday, June 29, 2011

Fact based or greed based? What the majority don't seem to understand is that under the Bush administration back in 2005, at the urging of Dick Cheney, former Halliburton CEO, Congress exempted fracking from the Safe Drinking Water Act (SDWA) as part of the Energy Policy Act, a loophole that exempts hydraulic fracturing from regulation. There are no balance of consequences. There's also more natural gas in PA than oil in the Middle East but we won't ever see the benefits(excluding some job creation and tax benefits), because the resource will be exhumed and exported because it's far more profitable to do so. As a property owner, you have only two choices. Allow fracking and get paid for the bastardization of your land, health, and drinking water-or don't get paid while they exhume it from a neighbors property. There is no going back-this is the "machine" that is Halliburton-the same that profited more from the ongoing Gulf Wars on Terror than any corporation on the planet.

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Nancy O'Keefe

4:32 pm on Wednesday, June 29, 2011

So, Michael, are you suggesting we throw in the towel and let Halliburton and the gas industry just take what they want?...that they’re going to do what they want anyway, so we might as well get paid for it? Your comments are minimizing what is really at stake, which is not getting money for their access to your land. The bigger issue is the dangerous consequences that result from hydraulic fracturing…that chemicals like hydrochloric acid, benzene, and other poisons that are lethal to humans and wildlife are leaching into our water supply. These are only some of the toxins that we know about, but there are others that the gas industry won’t tell us because it is “proprietary information.” The gas companies will, however, agree with studies conducted by the EPA that the chemicals used at drilling sites do, and could could continue to, threaten the drinking water supply for years as the drilling fluids remain in the rock formations. So, how is money going to help when the drinking water supply is contaminated? It would be safer to have a landfill in your backyard. One other thing: this response doesn’t even discuss the other environmental impacts like the energy and water resources that are expended in the course of drilling for the gas; nor does it mention that shale gas may release more greenhouse gases than other fossil fuels. I’ll save that for another time.

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